PROJECT REPORT

ON

“ To Study On Hr Outsourcing In India Company ”

A Project Submitted to

University of Mumbai for partial completion of the degree of

Bachelor of Management Studies (B.M.S)

Under the Faculty of Commerce

SEMESTER VI

2023-2024

By

Ms. ZIYA AKHTAR HUSSAIN PATEL

ROLL NO: 92

Under the Guidance of

PROF. KUNDAN TIWARI

K. M . AGRAWAL COLLEGE OF ARTS, COMMERCE AND SCIENCE, GANDHARE,

KALYAN (W).
 K. M . AGRAWAL COLLEGE OF ARTS, COMMERCE

AND SCIENCE, GANDHARE, KALYAN (W).

CERTIFICATE

This is to certify that ZIYA AKHTAR HUSSAIN PATEL has worked and duly completed

Project work for the degree of Bachelor of Management Studies (B.M.S) under

The faculty of commerce and her project is entitled To Study On Hr Outsourcing In

India Company under my supervision.

I further certify that the entire work has been done by the learner under my Guidance

and that no part of it has been submitted previously for any degree of diploma of any

University.

It is her own work and facts reported by her personal findings and investigation

Seal of the

College
Internal Examiner :
Name and Signature of

External Examiner
Guiding Teacher

Mr. Kundan tiwari

Co-ordinator
Mr. Mahendra Pandey

Self Finance In charges :

Mr. Sujeet Singh Principal :

Dr. Anita Man

Date of submission :
 Declaration

I the undersigned Ms. ZIYA AKHTAR HUSSAIN PATEL here by. Declare that the
work embodied in the project work titled ‘To Study On Hr Outsourcing In

India Company’ forms my

own contribution to the research work carried out under the guidance of
Mr. KUNDAN TIWARI is a result of my own research work and has not
been previously submitted to any other University for any other Degree-
Diploma to this or any other University. Wherever reference has been made to
Previous works of others, it has been clearly indicated as such and included
in the bibliography.
I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

Name and Signature of the student

Certified by
Name and signature of the Guiding Teacher
 Acknowledgement

To list who all have helped me is difficult because they are so numerous and the depth is
so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Dr. Anita Manna for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator, MR. MAHENDRA PANDEY

for his moral support and guidance

I would also like to express my sincere gratitude towards my project guide

Mr. KUNDAN TIWARI whose guidance and care made the project
successful.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me
in the completion of the project especially my Parents and Peers who supported me
throughout my project
 Index
Chapter No Content Page No

1 Introduction

• Topic

• Statement of problem and Need of the study

• Rational of study

2 Research Methodology

• Objective

• Hypothesis

• Scope of the study

• Limitations

• Research Methodology

3 Review of Literature

4 Data Analysis, Interpretation and presentation

5 Conclusion and Suggestions

❖ References

❖ Findings

▪ Questions
 1. Introduction

In the first chapter, background about this research will be presented, and the problems that
arise. Furthermore, there will be presentations of purpose, research question and objective of
the research, and finally the theoretical limitations of this dissertation.

1.1 Background
Observing the growing outsourcing trend in today’s businesses and profit organisations, one can
assume that the present processes and strategies when outsourcing have been developed and
customised to adapt to different organisational cultures and needs. Since organisations realised their
need to outsource, a new business was born and for a decade or two outsourcing agencies have
exploded on the market.
Regarding this dissertation it will be focusing mainly on the effects of Recruitment Process
Outsourcing (RPO) within the Human Resource Management (HRM) section on organisational
culture in Swedish offices. The main reason for this research topic is to identify abstract and
non abstract factors connecting RPO to subcategories within an organisational culture.

This research examines the effects of RPO at low level management and the employees under
them within a typical organisational hierarchy. The dots connecting the links between RPO and
organisational culture that I will investigate are Motivation, Performance Orientation and
Effective Orientation. The significance of RPO on these categories can be obvious for some
members of an organisation and totally oblivious for others. Stating a reason for this
phenomenon would be the members interest in its situation and position within an organisation.
Members of an organisation interest on their current situation of their department falls back on
our survival needs to conduct at least a minimum living standard, which in return influences
how motivated a member is directly manipulating the members effective and performance
orientation (Eriksson-Zetterquist et. al, 2006; Buhler, 1997; Hofman, 2007; van Zutphen, 2010).
Channelling the interest scope and the reason for selecting this topic is first of all to satisfy my
curiosity if cultures within organisations are preserved or manipulated by new „borrowed‟
members. The commercial interest would be to provide more knowledge and a swift guideline
for companies and organisations to follow and to aid in drawing possible scenarios when
outsourcing recruitment. Barnes Nelson (1991) writes that there is a lack of knowledge within
organisational culture in the recruiting department. This may have a negative effect on the
organisational culture within the organisation. Malik (2008) states that the organisational area
is ignored and there is a need to explore external factors which are affecting the organisational
area. Even Denison and Mishra (1995) encourage more research in the cultural area, doing a
more specific research. Since the recruitment process is the most expensive and time consuming
of all HR processes (Lee, 1994), interest from a scientific or research point of view would be
an opening for further research within this topic and possibly creating new thoughts and angles
to observe the same phenomenon.

1.2 Problem
Most companies outsource to achieve the benefits of cost reduction, strategically- and politically
driven reasons (McIvor, 2000; Kremic, Icmeli Tukel & Rom, 2006; Leavy, 2004; Elmuti &
Kathawala, 2000; Aubert, Rivard & Patry, 1996), however, there is a problem for these
companies to achieve a positive result out of outsourcing as they hoped for (Kremic et al., 2006;
McIvor 2000). Some of the problems a company can face while outsourcing, according to
Elmuti and Kathawala (2000) are reduction of the company’s control on the employees and
decreased liability of the company. Reasons for decreased liability can be several, but in this
case the relevance lies with the control reduction. When agencies send new members to an
organisation, the agency may fail to spot certain characteristics of personality that may disturb
the harmony within an office‟s cultural environment causing negative effects on members
loyalty to the company increasing risks for carelessness, leaking data, and industrial espionage
(Ramachandran & Voleti, 2004).

“The most prominent risks in outsourcing are information security concerns and loss of
management control” (Yang, Kim, Nam & Min, 2006, p.3772)
 Firms not implementing strategic HR may pose risks towards the role and job security of HR
managers when outsourcing (Klaas, McClendon & Gainey, 2001). Long-term care and security
provided by an organisation towards its members is reflected on the employees‟ loyalty, will to
preserve itself within the company, and residing in the company for a minimum time span.
Meanwhile, the contract between the employee and the employer limits advancement
opportunities and decreases job security, in this case, when outsourcing agencies are frequently
used for high position jobs (David, 2010).

Therefore depending on existing organisational culture, some of the influences on the employees
behaviour is directly related to his/her environment, which in return is noticed by all employees.
For example when an organisation is unbalanced and harsh measures may need to be taken, the
worry and tension in the air can be cut with a knife.

Kremic et al., (2006) state that the social costs are hard to define in numbers when outsourcings. At
the same time, social costs can be important to have knowledge of in order to have the control as Elmuti
and Kathawala (2000) write. Problems that may otherwise arise are “low morale, high absenteeism,
lower productivity” (Kremic et al., 2006, p.469). Since recruitment was determined to be an important
part of strategy and is being outsourced, the question that arises is, to which extend can the outsourcing
of the recruitment function influence various organisational outcomes.
In short, problems that arise when outsourcing recruitment are all directly related to psychological
characteristics and factors affecting the work environment that result in effects on the employees
psyche.

1.3 Purpose
The purpose of this dissertation is to explore how outsourcing recruitment processes influence the
organisational culture.

1.4 Research question

Question: How does Recruitment Process Outsourcing affect organisational culture?

Objective: To identify how Recruitment Process Outsourcing affects organisational culture, and its
different factors. The factors of organisational culture that will be investigated are motivation,
performance orientation and effective orientation and these will be investigated through interviews
with five international banks in Sweden.
 1.5 Theoretical Limitations
Theories this dissertation uses are limited to relationship, outsourcing, and organisational culture
theories. The choice of outsourcing theories is limited to the recruitment process outsourcing, which
will be explained further down the paper. This paper does not discuss theories about other business
processes that can be outsourced than HR so there is no connection to other parts. Recruitment
Process Outsourcing (RPO) is the only part discussed of HR. Choice of organisational culture
theories were limited in order to connect the three factors motivation, performance orientation and
effective orientation to organisational culture, which this dissertation is investigating in relationship
to RPO.

1.6 Outline
This dissertation presents six chapters, starting with the Background which includes background,
problem, purpose, research question and objective, and theoretical limitations. Moreover, the
second chapter is the Research method, which presents the research philosophy and approach, and
choice of theory and methodology. Chapter three is the Literature review, where the theories are
presented as well as the model created. Subsequently in chapter four, the Research method is
presented where eight research method questions such as research design and strategy, data
collection and validity are answered. In chapter five the Empirical findings are presented, and later
on in Analysis the findings are being analysed. The last chapter includes the Conclusion where the
dissertation is summarised and further research is presented, as well as other parts of the conclusion
chapter.
The Journal of Nepalese Business Studies
38
Human Resource Outsourcing: Issues and Challenges
Amitabh Deo Kodwani
ABSTRACT
Key words : human resources, outsourcing
1. Introduction
The productive capacity of all business depends on three factors: the capital resource, the physical
resource and the human resource” -(Peter.F.Ducker) This statement holds a lot of
significance because of the fact that of all the three resources, only the human resources possess the
productive capacity for which the upper limits are not defined. So in order to utilize the true worth
of the employees to its fullest, one need to outsource the non-core activities of the organization.
Outsourcing can be defined as the situation where an external vendor or service pro- vider provides,
on a recurring basis, services that would normally be performed in-house by the organization. In
other words it can said that, outsourcing is a process where in organiza- tions concentrate on those
aspects of their business processes, which gives them a competi- tive advantage (called as
corebusiness) and contract out or shell out the noncore aspects of their business processes. With the
increasing global competition, organizations are looking outsourcing as a means of gaining a
comparative advantage over other competitors. Outsourcing is thought to benefit a business by
allowing an organization to focus on its “core competencies” or “core processes.” In this way, an
organization can divert its energy away from peripheral or non-core activities of the business which
lies outside of its “true” area of expertise, and instead of that concenterating more energy and focus
on what it can does well in order to differentiate itself from other competitors. By outsourcing their
noncore activities, organizations would be able to reduce their operating costs too. This is possible
by reaping the benefits of a supplier’s lower cost structure, which could result from econo- mies of
scale or other advantages associated with specialisation available with the outsourcing service
provider. One very fine example of this is the BP-Exult deal where Exult handled the administrative
elements of compensation, benefits, payroll, organizational development, performance
management, employee development, training, recruitment and relocation with
The Journal of Nepalese Business Studies Vol. IV No. 1 Dec. 2007
Human Resource Outsourcing: Issues and Challenges
39 its web based software and left British Petroleum responsible for HR policy, strategy, pro-
fessional resources and labor relations. It was observed through literature survey that around 85 per
cent of companies have realized that outsourcing critical support services can en- hance their
competitive edge, without the need to invest in infrastructure. Some of the companies are
outsourcing entire activities where as some of them are outsourcing partially. If we look at the
history of HR outsourcing (HRO) industry, it can be traced back to more than five decades, when
ADP (Automatic Data Processing) set up its payroll processing services in the US. Today, the
company has annual revenues of $7 bil- lion and 40,000 associates.(www.citehr.com/information-
about-hrbpo-vt7351.html) Survey conducted by The Conference Board reported that more than
three-quarters of com- panies are either outsourcing their major Human Resource functions or are
planning to do so in the near future. Also two-third of the US companies accepted that they fully or
par- tially outsource five or more HR functions.( www.conference-board.org). It is believed that
with in five to six years, HR BPO (HRO) companies will employ half of all HR profes- sionals.
Human Resource Outsourcing market is growing vary rapidly. Though for the last three years HRO
market remained flat, but in the coming days it will regain momentum and is expected to grow very
fast as compared to other functional outsourcing businesses. The global HR outsourcing industry is
estimated to reach $31 billion in 2007 and $50 billion by 2010, representing a compound annual
growth rate (CAGR) of 12% during the 2007-2010 period. [Hewitt Associates, LLC SWOT
Analysis, Jun2007, p1, 8p; (AN 25629859)] India too is witnessing the growth of HRO. The good
news for India is that nearly
50% of HRO business has an offshore component, so a lot of it is actual coming to India. The latent
size of HR outsourcing in India is about $2 billion with a current market of more than $27 million
and it is growing at a rate of about 50 per cent (www.Hewitt .com). The first HR BPO in India was
started by Secova eServices in Chennai on December 2003, having 50 – seater facility.
Experts believe that in present times HRO is undergoing a transition phase. It is moving out from
the realm of bigger companies to small and mid-sized organizations. There has also been a
transition in its user acceptance, where it is moving from a corporate domain to PSUs’ and the
Government sector. All this reflects on the growth of this sector. (http://
www.expressitpeople.com/20030428/cover.shtml).
Another major issue in HRO process is to decide which HR function need to be offloaded and also
which firm to outsource. This is one of the biggest challenges, because it may adversely affect
company’s performance if selected wrongly. Before going for offloading any in-house HR related
activity to external agency; one need to be sure about the pros and cons of outsourcing it. Though
ther are several benefits of outsourcing HR related activi- ties, there are some shortcomings too.
In a survey of 129 large companies representing nearly 2 million employees it was observed that
organizations are satisfied with their HR outsourcing decisions and plan to outsource more HR
services by 2008.(findarticles.com/p/articles/mi_m3495/is_6_50/ ai_n13826255). In another survey
slightly more than 50 percent of survey respondents re- ported that they had fully achieved their
outsourcing objectives, 42 percent had partially achieved them, and less than 1 percent of
outsourced human capital functions had been
The Journal of Nepalese Business Studies
40
brought back in-house.( http://www.gao.gov/htext/d04679.html)
This paper highlights the various issues and challenges of HRO including the pros and cons of it
and recommending what organizations need to take precautions while going of HRO.
2. Functions of HR outsourcing
HR outsourcing generally happens in the areas like payroll, employee benefits ad- ministration,
network, fixed assets administration, receivable and logistics management, hardware maintenance,
telemarketing, call centers and database management. In India, the common processes which are
outsourced are generally related to training and development, payroll processing, surveys,
benchmark studies and statutory compliance.
HR outsourcing continues to grow in the future. More and more HR functions will be outsourced.
As per the survey conducted in 2005 by Hewitt Associates, a global human resource services firm
on 129 large companies found that 94% respondents outsource at least one HR function. Further
their study highlights that the most commonly almost fully outsourced HR functions are:
Exhibit 1: Functions of HR outsourcing
HR Functions % of Respondents
Outplacement Services 91%
Employee Assistance Programs 89%
Defined Contributions 401(K) 84%
COBRA administration 77%
Defined (Pension) 68%
Health benefits 69%
Source www.hewitt.com (Suzanne Zagate & Jennifer, 2005)
By 2008, companies plan to expand outsourcing into the following areas, listed in order: leave
management, learning and development, payroll, recruiting, health and wel- fare, and global
mobility. (findarticles.com/p/articles/mi_m3495/is_6_50/ai_n13826255) 3. HR outsourcing
Suppliers:
There are three types of HRO suppliers :( According to Phil Fersht, Senior Analyst,
Business Process Outsourcing for the Yankee Group)
Specialists in discrete sub processes of HR like payroll, benefits, hiring and recruiting, and training
and education. For exampl; Hewitt Associates and Automatic Data Pro- cessing (ADP)
One-stop-shops that aggregate multiple HR functions into one HRO offering. For ex- ample; Exult
and Fidelity Employer Services
Super-suppliers with worldwide processing facilities offering full service at lower cost.
They take advantage of economies of scale. For example IBM Business Consulting
Services, and Accenture. (http://www.outsourcing-offshore.com/go.html)
Where Hewitt and ADP continue to serve the mid-market buyers with 500 to 2000 employ- ees,
one-stop-shop and super-suppliers will focus on buyers with 10,000 or more employ- ees.
(http://www.outsourcing-journal.com/feb2004adpstudy.html?email004956) Human Resource
Outsourcing: Issues and Challenges
41
4. Drivers of Human Resource Outsourcing
Much of the literature available on outsourcing in general has examined the rationale behind such
decisions. The key considerations behind HRO being the need for increased focus on core business,
cost reductions; greater business flexibility and need for specialized expertise (Jennings 1996,
Bettis et.al. 1992, Quinn et.al. 1990).
HR outsourcing is sometimes driven by the evolution of the HR function within the organizations
(Greer et al., 1999). The literature suggests extensive use of outsourcing be- cause of the relatively
underdeveloped HR function in their organization or where it is being restructured. But outsourcing
in such organizations is confined to administering com- pensation and benefits, record keeping, and
applicant screening. (NICOM, 2005) Further literature review highlights that there are three main
motivators for HR outsourcing, they are reduce overall HR service delivery costs (37%, free time
for strategic HR (23%), and improve service quality (14%). Other reasons are highlighted in exhibit
7 given below.
Exhibit: 7
Source: HR Outsourcing: New Realities, New Expectations (2005 HR Outsourcing Effec- tiveness
Survey Report) www.towersperrin.com
Cost reduction has been the predominant motive for outsourcing (Hoek, 1999). As per one of the
survey conducted in 2005, around 37% of the respondents accepted that cost reduction is one of the
prime factors as compared to 32 % in 2004 (www.towersperrin.com). Outsourcing decisions
commonly target a minimum of 15 per cent cost saving and some- times in the range of 20-25 per
cent (Jennings, 2002; Bounfour, 1999).
Third important reason as cited in the survey (exhibit 7) is improving service quality. Not only
external customers need to be satisfied for successful business operations but internal customers too
play a vital role and thus they also need to taken care of. By improv- ing service quality, HR
professionals can help organization to satisfy their employees as
The Journal of Nepalese Business Studies
42 well their customers. There are other reasons too as cited by the survey. Though none of the rest
of the issues crossed 10%, but will definitely be the important issues in the future. These issues are;
free HR time for better technical solutions (7%), standardize processes (7%), improves HRIS (4%),
etc.
5. Benefits and Satisfaction With HRO:
The biggest contribution is in converting fixed cost to variable cost, and reducing additional
processing cost, ongoing expenditures and capital outlay. Infact the savings in the capital outlay has
been of main concern in the government organizations that have been operating with decades-old
legacy mainframe systems and now want to upgrade their ser- vices that can provide a better work
environment for employees, especially the younger, technically-savvy employees who are working
for the government and are demanding Web-
enabled HR services. (http://www.outsourcing-hr.com/private.html)
Credit Suisse First Boston estimates that it has saved $115 millon since 1994 by outsourcing most
of its transactional human resource functions. Don Packham, vice Presi- dent of Human Resources
for BP Amco’s US operations, reports savings of $ 50 million in the first two and half years of BP’s
outsourcing contract. Similarly Cydney Kilduff, Direc- tor of Recruiting and staffing at Kellogg,
mentioned that the outsourcing had reduced the time it took to fill vacancies at Kellogg from 67
days to 39 days, and the cost per hire was reduced from $ 7905 to $ 3784. (www.aon.com)
Let us look at the satisfaction level of those companies who have outsourced their HR functions, as
mentioned in various studies:
Exhibit 8: Benefits of HR outsourcing
Satisfaction level % of respondents
Fully Satisfied 89%
Achieved hope for benefits 85%
Unexpected benefits 20%
Achieving Cost Savings 45%
Outsourcing transaction smoothly 81%
Outsourcing function brought back in-house 23%
Continue with the same vendor 70%
Source (www.aon.com, www.towersperrin.com and www.hewitt.com)
If we look at the above mentioned exhibit, it clearly indicates the benefits of HR outsourcing. The
overall satisfaction level has gone up from 51% in 2002 to 89% in 2005. Another issue is of
outsourcing function brought back in-house, which has been mentioned by 23% respondents.
Actually out of this 23%, 68% of the companies have brought back their outsourced function
because of poor services provided by the vendor, whereas only 32 % of the companies said that
they brought back because they did not achieved anticipated cost savings. (www.aon.com,
www.towersperrin.com and www.hewitt.com) 6. Drawbacks or problems of HRO:
One of the problems with HRO is difficulty in accepting the change by the employ- ees of the
organization. There is also anxiety about losing control over the process and lay Human Resource
Outsourcing: Issues and Challenges
43 off. Such employees reactions generally create difficulty in outsourcing. This resistance will be
higher when more scope is added later. Effective communications and change man- agement
programs (OD initiatives) are especially crucial at this stage when the new scope involves
implementing a self-service platform. Actually such systems are not intuitively obvious. Employees
need to be helped to adopt to this the new system.
Also there are various risks associated with HRO. One of such risk is the business risk which may
arise due to cheap outsourcing contracts. There is also spillover risk, i.e. exposing of confidential
matters to competitors. Political risks is another issue in outsourcing. One such example of this is
the controversial issue in the US during the time of elections when opposition blamed outsourcing
for unemployment and wanted it to be banned. An- other problem in HRO is that sometiimes it
brings threat to the organization culture and it gets totally out of control if gone into the hands of
unsympathetic outsourcers. Also vendor organization should be well aware with the laws and
should act in compliance with laws of his and client’s country otherwise legal issues may crop up
and may adversly affect organi- zation.
One more problem that arises is the loss of personal touch with the employees. Be- cause an in-
house HR person interacts daily with your employees, they will likely have more of an interest in
your employees. This is the reason why Morgan and Stanley decided to provide retirement planning
services in-house. The loss of talent generated internally, potential redundancies, fear of service
provider ceasing the trade, loss of concentration on customer and more focus on the product are
other drawbacks or challenges of HRO. Also when an organization is using a PEO, giving up the
right to hire and fire thier employees, may not be desirable for their particular business. Mostly
PEOs insist that they should have the final right to hire, fire, and to discipline employees. This may
not be healthy for an organization in the long run. And if an organization decide to use an E-service,
the same issues would remain with any ASP. When everything is stored and handled online, there
might be concerns about the security as well as the potential crashes, both of which can be
detrimental to any business organization. Common complaints about HR outsourcing range from
payroll mix-ups to payroll not being deposited on time to denied medical claims.
(www.entrepreneur.com/humanresources/employmentlaw/article58222.html) Vendor selection is
another major issue in outsourcing HR. If we select the wrong vendor, then we won’t be able to
enjoy the fruits as expected from HRO. Companies say that one of the important requirements
while selecting vendor for outsourcing HR is vendor’s demonstrated HR process expertise, which
has been responded by 95% respondents as mentioned in the survey conducted by Hewitt associates
in the year 2005. (www.Hewitt .com).
7. What Companies Should Do To Have Successful HR Outsourcing?
Drawbacks can be compensated if an organization takes necessary precautions of paying more
attention to process redesign and details, and at the same time keeps strategic parts of HR like
Human Resource Planning in-house, as it revolves around critical activities and core capabilities
and thus provides sustainable lead in the long run. This is the reason why HR activities like payroll
processing is generally outsourced since it provides less competitive advantage and is a non-core
activity for any organization. Thus there is need to
The Journal of Nepalese Business Studies
44 create a balance between external service providers and internal operatorsOrganizations need to
outsource thier HR activities as per their size. Small and mid sized organizations should outsource
HR activities like payroll because they may lack economies of scale to perform that function
efficiently. Large companies should outsource HR activities like ben- efit processing because then
broader range of benefits are offered which reduce the econo- mies of scale of handling the activity
in-house.
In case of multi-supplier situation, good governance, change management, and ef- fective dispute
resolution structure need to be in place. It should be ensured by the organi- zations that all the
parties should work together nicely. However long-term contracts can be avoided as things are
changing rapidly.
Since outsourcers are the third party, communication travels three ways rather than two ways
involving organization, vendor and employees, giving room for mistakes. In such case
communication plays a very vital role. Sears, Roebuck and Co., retail giant was aware of this issue.
Hence it selected Hewitt Associates as their HR service provider to take over the work and both
companies ranked communications and commitment to mutual goals as the top two keys to their
success. This is also the foundation for their ability to adapt to change quickly and to innovate in
order to achieve the desired objectives. (http:// www.outsourcing-hr.com/reaping.html)
8. Conclusion
This article tried to highlight the overll concept of HRO and identify the main issues and and
challenges relating to outsourcing HR. The reviews of literature, as well as of recent surveys by
various organizations, show that HRO market is growing and will grow faster than the current rate.
Mike Christie, HR Outsourcing Consultant with Hewitt Associ- ates, says Hewitt posted a 15
percent increase in overall revenues last year. Most of the increased activity was in its core business
i.e. benefits, workforce administration, and pay- roll. offshore.com/go.html). HRO is of most
interest in those sec- tors of economy which are experiencing the margin pressure.
Though there are many benefits of HRO, which can not be denied but at the same time we need to
address various challenges of HRO. One has to take lot of precaution while planning for
ooutsourcing their HR activities. It was also oberved that in the recent times outsourcing has
undergone lot of advancement due to increased data security because of
new technology and changing perception of what can and cannot be outsourced but secu- rity issue
still demands attention i.e. how comfortable are buyers with having their propri- etary data being
transmitted offshore.
Also suppliers need to evolve additional metrics that aren't transactional in nature and that measure
more strategic value like workforce productivity, absenteeism rates, and employee turnover.
Offshoring HRO is booming and this is good sign for country like India, but suppli- ers need to
address several issues to maintain this momentum. Offshore employees which are hired to do
simple manual process work can't be expected to demonstrate advanced expertise such as
understanding different health care plans in different countries or answer- ing policy-based
questions.
HRO is also becoming more self-service. Company personnel are forced to perform Human
Resource Outsourcing: Issues and Challenges
45
HR activities like withdrawing money from their 401 (k) plans using self-service over the Web.
This requires employees to be more proactive, and suppliers have not yet defined the self-service
line beyond which buyers' personnel are hesitant to go. (http://www.outsourcing-
offshore.com/go.html).
HR Outsourcing must also be carefully evaluated and weighed against issues such as control, the
strategic value of technology to the organization, staffing, responsiveness/ ac- countability, and, of
course, overall costs.
If organizations have a broader perspective and are taking corrective measures be- fore going for
HRO then outsourcing will certainly help in coping with the peaks and troughs of the business.
Properly applied, including concerns, outsourcing offers many benefits; otherwise, it offers even
greater risks.Like most everything in life, HRO has come a long way. But there's still a long way to
go.
 OBJECTIVE OF STUDY

What Are The Objectives Of HR Outsourcing?

Outsourcing HR functions is a growing trend, with more and more companies choosing to
outsource at least some HR functions to a third party. This is driven by a number of benefits, which
include freeing up in-house staff from tedious, routine tasks, providing better benefits, and
improved compliance. More and more companies are finding that outsourcing HR functions
provides them with a competitive advantage.

So, what are the objectives of HR outsourcing, and how can you reap the numerous benefits?
Three Major Objectives of HR Outsourcing
HR outsourcing can be boiled down to three major objectives, all of which can easily be achieved
with the right partner.

Cost Savings
Saving money is, of course, a primary goal. HR functions can be expensive, especially if they are
done inefficiently or inaccurately. Specifically, outsourcing HR can substantially reduce costs in
two areas.

Administrative Costs
As your company grows, so does the amount of time spent on routine tasks such as benefits
administration and filing payroll taxes. Adding another person to your HR team can be costly. So
can delegating administrative tasks to other people whose talents are best used directly growing the
company.

Outsourcing HR can allow you to get these routine tasks done at a fraction of the cost, without
interrupting or distracting other employees.

Benefits
By outsourcing HR functions, you can gain access to a master benefits plan, which is negotiated by
experts and gives you the advantage of economies of scale. This allows you to get much better
benefits than you can afford on your own, making you more competitive in the marketplace for
talent.

Human Capital Management

By outsourcing HR, your in-house HR team can focus on more important things that help grow
your company rather than spend time on transactional HR functions. They can use their expertise
and intimate knowledge of your company to improve in a variety of areas:

Company Culture
Having a strong company culture provides a number of benefits, including improved health,
increased retention, and higher productivity. Creating a good company culture is hard, and it is
something that requires a lot of attention and work from HR and managers. Outsourcing frees HR
people up to focus on employee engagement and turn your office into a great place to work.

Employee Relations
HR outsourcing can help with employee relations both by freeing up HR staff and by providing
access to training materials that have been developed over years. These materials can then help
lower the incidence of discrimination, harassment, and other workplace issues.
With more time, HR can engage in practices proven to improve employee relations, such as
continuous feedback.

Talent Acquisition
Combining a strong company culture and better benefits makes you much more competitive in the
job market. It allows you to attract top talent, which can otherwise be hard for small- and medium-
sized companies. Attracting top talent, in turn, strengthens the company culture, and sets up a
feedback system that continues to bring good talent to your company. Strong company culture also
increases employee referrals, which tend to bring a very high quality of candidates.

Increased Efficiency
Finally, outsourcing your HR can increase the overall efficiency of HR functions, saving time and
money both and helping your business grow. Particularly, it can help:

Focus on Core Competencies

When HR is overworked, routine tasks from HR tend to spill over into other departments. These
tasks do not generate revenue and are generally not the best use of your employees' time. By
outsourcing these routine tasks, you free your employees to focus on their core competencies and
work on the company's actual mission. This is even more important if routine tasks are being
picked up by the owner to make sure they get done, distracting them from strategic planning and
handling the business' future.

Payroll and Employment Taxes

By outsourcing HR, you can let your partner's dedicated experts handle processing payroll and
remitting employment taxes. These tedious tasks take several hours per pay period, and outsourcing
them lets your team do more interesting and overall useful things. It also reduces your compliance
risk, as the task is handled by experts who have the right tools and know how to use them
effectively.

Vendor Relationships
HR works with a lot of vendors. For example, you might have a broker for group health insurance,
workers compensation, retirement benefits, etc. By outsourcing, you reduce the number of vendors
you deal with on a daily basis.

This means you only have to worry about one bill a month, are spending less time processing bills,
and are less likely to miss a payment because it fell through the cracks. You can also predict your
expenses better, making it easier to budget.

The objectives of outsourcing HR ultimately boil down to saving money, saving time through
improved efficiency, and increasing productivity. HR outsourcing simply works, and it helps you
provide better benefits to your employees, avoid compliance problems and, above all, build your
company into a great place to work.
 • Objectives of HR Outsourcing Companies in India:

1. Cost Efficiency: One of the primary objectives of HR outsourcing companies in India is to

achieve cost efficiency for their clients. By outsourcing HR functions such as payroll processing,
recruitment, and training, companies can reduce their operational costs and focus on their core
business activities.

2. Access to Expertise:Another objective is to provide clients with access to specialized expertise

and resources. HR outsourcing companies in India often have dedicated teams with extensive
experience in various HR functions, allowing them to deliver high-quality services and solutions.

3. Scalability: HR outsourcing companies aim to offer scalable solutions that can adapt to the
changing needs and growth of their clients' businesses. Whether a company is scaling up or down,
outsourcing allows for flexibility in managing HR operations without the need for significant
investments in infrastructure or hiring additional staff.

4.Risk Mitigation: Mitigating risks associated with HR compliance, legal issues, and data security
is another key objective. HR outsourcing companies in India stay updated with the latest
regulations and industry best practices to ensure compliance and minimize potential risks for their
clients.

5. Enhanced Focus on Core Activities: By outsourcing non-core HR functions, companies can

focus more on strategic initiatives and core business activities. This can lead to improved
productivity, innovation, and competitiveness in the marketplace.
 • Theoretical Foundations of HR Outsourcing Companies:

1. Transaction Cost Economics (TCE):TCE theory, developed by Ronald Coase and later
expanded by Oliver Williamson, suggests that firms choose between internalizing activities
within the organization or outsourcing them based on transaction costs. HR outsourcing
companies in India apply TCE principles by offering cost-effective solutions for managing
HR functions that may be more efficiently handled externally.

2. Resource-Based View (RBV): The RBV of the firm, proposed by scholars such as Jay
Barney and Wernerfelt, emphasizes the strategic importance of valuable, rare, and
inimitable resources and capabilities. HR outsourcing companies leverage their expertise,
networks, and technology infrastructure as valuable resources to provide customized HR
solutions that create competitive advantage for their clients.

3. Agency Theory: Agency theory examines the relationship between principals (e.g.,
company owners or executives) and agents (e.g., employees or outsourcing vendors) and the
challenges of aligning their interests. HR outsourcing companies in India act as agents for
their clients, managing HR functions on their behalf while ensuring alignment with
organizational goals and objectives.

4. Core Competence Theory: Coined by Prahalad and Hamel, core competence theory suggests
that companies should focus on developing and leveraging core competencies that provide a
sustainable competitive advantage. HR outsourcing companies in India help clients enhance
their core competencies by handling non-core HR functions efficiently, allowing them to
focus on areas where they excel.

By aligning their objectives with these theoretical foundations, HR outsourcing companies in India
play a crucial role in enabling organizational effectiveness, efficiency, and strategic agility for their
clients.
 Hypothesis. Once these hypotheses have been framed properly they need to be validated through data.
There is a need to have clarity in terms of what each intervention is expected to bring to the business.
So how is the validation done? The best way to validate this data is (a) look for relationships between
HR data and business data through correlation and regression analysis and (b) collect business data
before the HR invention e.g. training and after the training and check for significant changes through
tests such as the t-test. I find these two approaches to be very good and they are statistically sound.
Others have gone a step further and they are running proper experiments with a control group and an
experimental group; e.g. train one group(randomly chosen) of salespeople and not another and
compare their performance.

HR need hypothesis based thinking to add value. Below I share some examples of typical hypotheses
that HR can work on as they do their work.

1. If we train our sales staff in modern sales methods we expect sales to go up by 13%.
2. If we go on a culture transformation program we expect our revenue to go up by 26% and market
share by 3%.
3. If we introduce a performance incentive scheme for staff we expect our sales to go up by 18% in the
first year and 26% in the second year.
4. If we use psychometric testing for hiring we expect the percentage of above-average performers to
increase by 30% by the second year.
5. We expect the wellness program to reduce the number of unplanned absenteeism by 26% by the
second year.
6. If we train our managers on handling disciplinary cases we will reduce the number of mishandled
cases by 35%.

7. Customer service training does not reduce the number of customer complaints per branch { here you
can have a control group and an experimental group}
8. We hire graduates from the National University of Science and Technology because they perform
above average
9. If we introduce a performance management system, our sales will go up by 27% in the first year.
10. If we adjust salaries by 80%, overall business profitability will increase by 14% {operating profit}
11. If we introduce a process improvement program our cost of sales will go down by 33%
12. If we introduce executive coaching for all managers employee engagement will go up by 56%. {As
an example please note there is a very strong relationship between employee engagement and sales}
13. If we restructure our onboarding policy and procedures, turnover of new recruits will go down by
80% in the first 4 months of hiring.

Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant-
Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting Phone
+263 4 48194648/481950/2900276/2900966 or cell number +263 77 2356 361 or email: m or visit
our website at

SCOPE OF THE STUDY HR OUTSOURCING

HR outsourcing is the hottest in the industry and is an emerging trend in the Indian market. Most of
the branded organizations are outsourcing their requirements to outside firms. It is a big business &
almost two thirds of the companies studied for HR outsourcing had adapted to the
same.

HR outsourcing involves necessary administrative tasks such as payroll, benefits, education/training,

recruiting personnel, administration, to realize economies of scale and achieve standardization of
services. The changing business trends, market position and global competitive pressure have led
companies to spend more time focusing on their core business.

The companies have now realized that they cannot be best in everything so the good companies have
decided to go for the thing they are best at and outsource everything else i.e., focus on their core
competency, and let someone else do the rest in a more efficient and cost-effective manner.

he number of companies outsourcing HR activities continues to rise, and the scope of outsourced HR
activities continues to expand. HR outsourcing can happen in HR functions, like payroll administration
(producing checks, handling taxes, dealing with sick-time and vacations), employee benefits (Health,
Medical, Life insurance, Cafeteria, etc), human resource management (hiring and firing, background
interviews, exit interviews and wage reviews), risk management, etc. Outsourcing has become a
common response to manage people and technology resources strategically, enhance services, and
manage costs more effectively.
HR outsourcing generates additional capital by transferring assets to the providers. HR outsourcing
brings about revenue driven modification in an organization helping it to gain market access &
business opportunities via the providers network. HR outsourcing hits the provider capacity, process
& systems and fastens development. It expands the production and sales of a business at times of
financial crunches. It exploits the existing skills of an organization commercially to derive benefits
from same.

Being highly beneficial, HR outsourcing is gaining in scope and is expected to rise to much higher
levels, in the coming time.
LIMITATION OF HR OUTSOURCING INDIAN COMPANIES

Disadvantages of outsourcing to India:-

In my earlier article I have discussed what are the advantages of outsourcing to India, but here I
am discussing what all disadvantage a company may face if they decided to outsource thier work to
India. Please find disadvantages of outsourcing to India and its points as follow;

1. Political disadvantage:-

Change in political nature in India and the policies of the government may impact the outsourcing
partner adversely. Indian govt. policies are always influenced by the local political parties' attitude,
so change in political environment in India has a major impact on Indian companies outsourcing
policies.

2. Economic disadvantage:-

Current economic growth in India reduces the profit of the companies outsourcing to India. Change
in exchange rate between the currencies will have a major impact in the profit sharing between
outsourced and outsourcing companies.

3. Work culture:-

Difference in culture between the countries makes a major difference during outsourcing
contract. Standard of work in India is totally different compared to western countries.
Sometimes indian companies compromise in the quality to achieve the target this may impact the
quality of the service.

4. Competition in outsourcing companies:-

There are huge numbers of companies in Indian market trying to get outsourcing contract from
western countries. Due to high competition between the companies in India, some companies try to
get contract by bidding the project by quoting low cost. This forces the companies to recruite less
talented people by paying less salary and there by quality of the service will be impacted.

5. Time management:-
Unlike people from western countries Indian people give less importance to time. This may delay
the work and there by impact the productivity.

6. Lack of communication skills:-

Good communication is one of the important component of the success in a business. Even though
Indiaa have got highly talented and English speaking man power, lack of communication skill
develop a gap between the client and outsourcing partner. This will sometimes generate wrong
output.

7. Data security issues:-

Data Security is one of the common issues all the outsourced companies are facing nowadays after
outsourcing their business to third party. Once a company outsource the business to a company then
they won't have much control over the data. There are some instances in India that confidential data
has been leaked from the companies who was providing service to thier outsourcing client.

8. People Management issues:-

Outsourcing companies will have less control over the people working from the outsourced
companies. This sometimes forced them to work with people who are not much talented by
compromising their work culture.

9. Location disadvantage:-

Due to the time difference between India and western countries when people work from their
company Indian employees will be sleeping. So if there is any issue during their working time, they
have to wait till next day to get it resolved. Even though most of the Indian companies provide on
call support for the critical issues, working in the night will delay the process and reduce the output.
 2. Research Method

In this chapter different methodology methods will be presented, research philosophy, research
approach, and choice of theory and choice of methodology. At the end of each presented
methodology, there will be a presentation of the kind of methodology this research will use, to
get a better understanding.

2.1 Introduction
To understand the research methodology methods Saunders, Lewis and Thornhill (2009) made a
model, the research „onion‟ (Saunders et al., 2009, p.108), where the choice of the different
methodology methods are illustrated to understand the process, its philosophies, methods and
studies. There are six layers of this model the first layer shows the four philosophies, second shows
research approaches, third the research strategies, fourth the choice of methods, then time horizon
and at last techniques and procedures.

Philosophies
Positivism
Strategies Approaches
Experiment
Choices Survey Deductive

Mono method Case study Realism

Cross-
Data secional Action

collection and Mixed research

data analysis methods
Longitudal Grounded
theory
 Interpretivism
Multi-method
Ethnography Inductive

Archival research
Pragmatism
Time horizon

Techniques and procedures

Figure 2.1 The research 'onion'

(Source: Saunders, Lewis & Thornhill , p.108, 2009)
2.2 Research Philosophy
There are four different research philosophies, Positivism, Realism, Interpretivism and
Pragmatism, presented in Saunders et al., (2009). The first one, Positivism, is a concept
referring to a set of assumptions of the world and how to study it. The world is considered more
important than only one single person, therefore the social forces are to be considered which
are natural laws governing the behaviour is the result of the way the society is organised
(McNeil & Chapman, 2005). The second concept Realism, explains the truth is as we see it,
simply a realistic picture of reality. There are two types of Realism; the first one is direct realism
saying that “what you see is what you get” (Saunders et al., 2009, p. 114) and the second is
critical realism, implying that what I see is not always the reality and further investigation is
needed. In other words, this means that the way things are can be deceiving in terms of our
senses (ibid.). Furthermore, Interpretivism is a second concept that respects the difference
between people and objects. In order for this strategy to work; the researchers need to know the
“meaning of social action” (Bryman & Bell, 2007, p. 19). The last research philosophy is
Pragmatism, this philosophy states that there is a philosophy that can be a little bit of both
Positivism and Interpretivism, contrasting one another, but using Pragmatism philosophy one
is not forced to choose. Pragmatism philosophy says that a purpose of the research question is
the most important to decide the epistemology, ontology and axiology. Take into mind, one does
not need to choose one philosophy but is able to mix several (Saunders et al., 2009).

In this research the Interpretivistic philosophy will be used to understand the human behaviour
in the company and how the human behaviour can be affected by adding external factors such
as personnel from recruitment agencies into the organisation. Interpretivism is used when
investigating humans and not objects, and it is exactly what this dissertation will do while
interviewing the HR responsible who has the employees and their behaviour as his/her job and
should know how they work, what motivates them and how they have been behaving since RPO
started in the company. The Positivistic philosophy does not match the depth which this
dissertation is aiming for and the Realistic approach is not questioning what one experiences.
The last philosophy is not appropriate for this research because there is no need to use several
philosophies.
2.3 Research approach
The research approach depends on what is being examined and in what way the data will be
collected; approaches used are either Deductive or Inductive. The Deductive research approach,
begins with collection of theory, being the first step, and the collection of data second, meaning
that using theories and findings will aid in the collection of data and coming to an own theory
that either combines other theories or is completely different than others. In Deductive
approach, quantitative research is mostly used, but in some cases even qualitative researches
are made. Collecting data before reading and finding theories is the Inductive research approach,
where the collection of data is usually qualitative, and the research should come to a result that
may be different or similar to other theories examined after the result is concluded (Saunders et
al., 2009). The Inductive approach is based on the researchers‟ observations on how behaviour
is related, either to one another or to other variables connected to the research (McMillan, 2004).
There is no way of saying which research approach is better than the other, since it depends on
what kind of research is being done (Saunders et al., 2009).

Finding the right research approach took time, while going through which approach was most
suitable inductive felt right even though some research has been done in the RPO area. This
study is using this research approach because of the need to create a new theory and model
suitable for the research. Simplifying the picture of how this research will take place starts off
with the data which will be collected by qualitative research, interviewing the HR responsible
person in the banks examined that cooperate with recruitment agencies, later on theories will
be read, finishing with a conclusion with my own theory drawn from both the data and theory
collection.

2.4 Choice of Theory

There are three relationship theories that are going to be used in this dissertation, Agency theory,
Resource dependency theory and Social/Relational exchange theory. Different conclusions are
being accomplished with these theories as a base. Agency theory and Resource dependency
theory will be used to examine the relationship between the recruitment agency and companies
using recruitment agencies. The Social/Relational exchange theory explains the relationship
between employees and also what effects recruitment has brought to the company. After the
relationship theories, Recruitment theories will be presented to understand the importance of
recruitment, how recruitment is being processed and the
advantages and disadvantages of internal and external personnel in organisations. Furthermore,
Outsourcing theories will be presented with different kind of outsourcing, all from Business
Process Outsourcing (BPO) to Recruitment Process Outsourcing (RPO). Moreover,
Organisational culture theories will be presented to understand what organisational culture is,
and what it means for an organisation. Last but not least, the three factors examined Motivation,
Performance orientation and Effective orientation will be presented with Motivation theories
as the leading theories since the three factors are all connected and strive for the goal of
 becoming better. Theories will be presented in the theory part of this dissertation; they will be
explained further to get a clear view of why they are used and why they suite this dissertation.

2.5 Choice of Methodology

In this dissertation the Interpretivistic philosophy combined with an Inductive research
approach will be used as a method. The philosophy most relevant to this dissertation is
Intepretivism since the aim is to study social behaviour examined in companies in the sense of
how external forces can influence the culture in these companies. Moreover, finding the right
theories for this study was not easy, making some mistakes were necessary to come to the right
solution, even the model was recreated to fit this study. Hence, the research approach is suitable
because of the new research this study brings.

One needs to understand the difference between quantitative data collection and qualitative to
be able to do the best analysis of the study (Saunders et al., 2009). Qualitative data collection is
used to collect data of words and meanings while quantitative data is used to gather data through
numbers and meanings (ibid.). Finding qualitative data is done through exploring, explaining and
describing an observable fact, quantitative tends to explain the observable fact with numbers and
standardised data giving a non realistic picture of reality as qualitative does (ibid.).
This study will use qualitative data collection because the research question is about humans
and behaviour, and these kinds of questions are easier to get reliable answers by a qualitative
data collection than a quantitative because as they say a picture says more than a thousand
words. Information about how the company‟s organisational culture is affected is not anything
one can understand by quantitative data since it is about the atmosphere and how people interact
in between one another. Using interviews, one can gain data required for this study since there
is a need of a deeper understanding of how the social behaviour is formed in society, than the
broad understanding one can get from quantitative research approach.
 3. Literature Review

In this chapter, the literature used will be presented. First a structure of the literature review
will be presented followed by theories about relationships, outsourcing and organisational
culture.

3.1 Structure of Literature

This part will explain the theories suited for the subject in matter, they will first be presented
and discussed, further on they will be applied on the analysis as a confirmation on the subject. First,
some well known and used theories will be presented to explain the relationship between the parties,
the recruitment agency, employees and the bank hiring the recruitment agency. Secondly the
recruitment theories will be explained including the recruitment process. Furthermore, outsourcing
theories will be presented and the steps down to Recruitment Process Outsourcing (RPO) and then
organisational culture will be explained. Last but not least, motivation theories will be presented
where performance and effective orientation are included since they are all connected.
The steps the literature review is going to follow are; Relationship theories Recruitment
Theories Outsourcing theories organisational culture theories Motivation theories.

3.2 Relationship theories

3.2.1 Agency Theory
Agency theory is the theory based on the relationship between an agent and a principal
(Donaldson & O‟Toole, 2007; Eisenhardt, 1989). In the theory the principal party delegates
work to the agent party, who accomplishes the principal‟s orders. Examples of agent-principal
cases can be employer-employee, CEO-owner or buyer-supplier (Eisenhardt, 1989). The parties
in this dissertation used as principal-agent are the recruitment agency (agent) and the company
hiring the agency (principal), where the agent needs to assure the principal‟s requirements.
Eisenhardt (1989) writes that the model of the principal-agent supposes two problems: the first
one is a goal conflict between the two parties, a simple outcome to measure, and the second is
where the agent has less risk capability than the principal. These two problems can create
dissatisfaction for the parties leading to a closure of the agreement.
 Theorists‟ believe that there is a reason for this and it is because the agents are putting their
own interests over the principals, making it hard to perform as agreed (Abrahamson & Park,
1994).
This dissertation will examine the relationship between the recruitment agency and the company
hiring the agency. Supposedly the company hiring the agency has been affected in any way,
taking into mind if the recruitment agency is taking or not taking any risks in the evaluation
process, can lead to bad influence on the employees‟ already working there.

3.2.2 Resource dependency Theory (RDT)

Resource dependency theory (RDT) is a theory trying to explain the behaviour of the
organisation and inter-organisation through analysing the critical resources an organisation is
required to have to be able to survive and function (Johnson Jr., 1995). Pfeffer and Salancik‟s (1978;
2003) view on the theory described that the resources needed from the organisation are dependent
on the external sources; the resources needed are financial, physical, and information (Pfeffer &
Salancik, 2003; Fink, Edelman, Hatten & James 2006). There are two different theoretical
dimensions of resource dependency discovered by Casciaro and Piskorski (2005), power imbalance
and mutual dependence. These two dimensions are combined in the original theory, but Casciaro
and Piskorski (2005) do not believe in the combined dimension because they have opposite effects
on the ability to reduce dependencies of the external sources an organisation has (ibid.).
The resources of a company are areas this dissertation will focus on as well as the human
resources. Since the RDT is used to explain the behaviour of the organisation and inter-
organisation, it is useful in this type of research where resources are examined. This research is
about how the organisational culture is affected when recruiting from recruitment agencies and
this theory critically analyses resources, just as this study is analysing RPO.

3.2.3 Social/Relational exchange theory

Social/Relational exchange theory is one of the most conceptual theories in order to understand
the behaviour of an organisation. The theory presumes that the mutual transactions have the
ability to generate a relationship of high quality, yet it only occurs in certain situations (Barker
& Camarata, 1998; Csopanzano & Mitchell, 2005). It is a theory used as a
social power in different areas; some of these areas have already been investigated by
researchers: networks, board independence, organisational, psychological contracts and leadership
(Csopanzano & Mitchell, 2005). Researchers of this theory see the cooperating parts motivated by
three issues, the first one is to exploit their costs, the second is valuation of rewards and the last one
is reduce the costs. Most see the valuation of costs and rewards as a steady process (Casmir, 1994).
Cook & Emerson (1978) write in their article about two different ways to enlarge the exchange
view; the first one is that organisations need more than one member in the management and the
second one is to have three or more employees in a joint network. The two ways are
complementary and shall be used in order to succeed according to the author.

Relations between internal and external parties within or outside an organisation are defined by
the behaviour of employees, disregarding position and external forces affecting an organisation.
Simultaneously, the HR department‟s role is based upon these relations making them
ambassadors between all the different parties involved with an organisation.

The behaviour of a specific party can of course, naturally, affect the behaviour of another, which
in definition means that there are no completely independent characters, person A can affect
person B and vice versa. Regarding the previous statement, it is concluded that behaviour can
increase or decrease the value of an assignment an employee has. This phenomenon will be
investigated in the research to learn more about the employees conduct after a recruitment
agency is involved, but first an explanation on the different parts of outsourcing will be
explained, starting with outsourcing in order to understand the RPO.

3.3 Recruitment
Recruitment is the prime issue for managers in companies according to Münstermann et al.,
(2010). The recruitment process has become a significant process not just for researches but
also in practice and it is also the process which takes most time and costs of all HR processes.
HR assets are the key parts of organisations which makes the recruitment process important
(Lee, 1994). Being effective and hiring the right people is significant for the organisation to
clearly identify their needs so that the hiring process is done in a proper and effective way
(Münstermann et al., 2010). The process model from Münstermann, Eckhardt & Weitzel (2010)
is presented below to understand how companies recruit.

Employer Candidate Applicant Pre-

Selection Hire
branding attraction tracking selection

Figure 3.1 Recruitment process

(Source: Münstermann, Eckhardt & Weitzel, p.4, 2010)
The different steps in the process may not always be easy to understand just by looking at them,
so here is an explanation of each step:

 Employer Branding
Creating an attractive image of the employer towards potential candidates as well
as customers who may also be potential candidates

 Candidate Attraction
Gaining potential candidates views of the organisation as a constructive work place
(Rynes, 1991), including creating a positive force towards the organisation where
the will to improve and develop the organisation is given (Aiman-Smith, Bauer &
Cable, 2001)

 Applicant Tracking
Keeping track of applicant information

 Pre-selection
First round of candidates approved by the employer

 Selection
Final selection of approved candidates

 Hire
Welcoming the applicant as a new member of staff

Companies are struggling with questions regarding the HR activities and their organisation
(Ordanini & Silvestri, 2008). Since recruitment takes most time and costs, companies may
choose to outsource this particular HR process (Dasborough & Sue-Chan, 2002). Moving the
recruitment process to a recruitment agency will save the managers‟ time to focus on managing
and less on the bureaucracy creating more efficient planning (ibid.). The main questions are
which activity they should outsource and which to keep internally. An answer from Ordanini
and Silvestri (2008) is found logical and can be the easiest way for the companies to answer
their questions:

When activities are considered more transactional or non-strategic, they should be

outsourced. When they represent core practices or are of a relational nature, they should be
retained in-house (Ordanini & Silvestri, 2008, p. 373).

Leading experts from Baker & McKenzie lawyers and the Macquarie Graduate School of
Management (2009) have identified some advantages and disadvantages with both internal and
 external recruiting (table 3.1) which shows how managers also can see if they should outsource
or not.

Internal Candidates External Candidates

Advantages
Increased knowledge of the candidate‟s Larger pool of candidates
abilities is available New skills and ideas brought into the
organisation
Candidate has knowledge of job
requirements and the organisation Good for Can be cheaper than training internal
candidates
employee morale Organisation needs to hire
only at base level Reduces possibility of favouritism
Lowe cost Encourages existing employees to
Provides a demonstrated reward for good stay competitive in terms of skills
performance development
Can address diversity considerations
Disadvantages
Can lead to insularity Increased difficulty and risk associated
Can encourage infighting for promotions with recruitment and selection process
Requires effective training and appraisal Longer training and induction periods
systems needed
Unsuccessful candidates can become Internal candidates might feel overlooked
discontented New candidate might not “fit” culture
Higher cost

Table 3.1 Advantages & Disadvantages of recruiting internal and external job candidates
(Source: Leading experts from Baker & McKenzie lawyers and the Macquarie Graduate School
of Management, p.223, 2009)

RPO, young and undergoing constant development is one of the processes derived from the HR-
process; it is circumstantial and not always cost effective. Considering the circumstance of the
process, it is directly related to the coercive and environmental factors affecting the decision
making. With coercive the definition relates to government laws, rules, and other legislations
the organisation has to abide by for deciding whether to outsource recruitment or not.
(Dasborough & Sue-Chan, 2002; Lever, 1997)

Moving along to more internal than external factors for the decision making, managers must
consider the recruiting agencies offering the service, where trust is an important adjective for
the relation between them. Lack of trust will lead to no cooperation between the client and the
vendor, yet taking into consideration that a long term relation will improve the trust within the
relationship (Dasborough & Sue-Chan, 2002; Ordanini & Silvestri, 2008). An agency in this
situation may be opportunistic and cause its client setbacks, so it is a question whether the costs
for maintaining the trust or breaching the trust is cheaper. Of course the more trust there is the
less monitoring costs will be dealt to the organisation (Dasborough & Sue-Chan, 2002).

3.4 Outsourcing
Outsourcing is used in business strategy, in public and private organisations (Kremic et al.,
2006) and it is a powerful tool when used appropriately (Greaver, 1999). Outsouring can be
described as when an organisation delegates parts of its business to another company, and many
companies outsource divisions the company used to handle itself (Kremic et al., 2006; Elmuti
& Kathawala 2000; Aubert et al., 1996). Aubrey et al., (1996) write in their article that the
decision to outsource should be what is going to be outsourced and not whether to outsource or
not, this is something companies need to look at before the outsourcing decision is made.

There are different divisions companies are able to outsource, and the prime reason to outsource
is to reduce the costs (Quelin & Duhamel, 2003; Ngwenyama & Bryson, 1999; Greaver, 1999;
Aubert et al., 1996; Bettis, Bradley & Hamel, 1992). The basic reason is as mentioned above,
to reduce costs, but it is also to specialise the labour (Ngwenyama & Bryson, 1999; Quelin &
Duhamel, 2003). The labour reason is driven by different aspects, employee driven, which this
dissertation will look more deeply into, organisationally driven
and improvement driven (Greaver, 1999). The employee driven reason to outsource is to give
the employees a stronger career path and. to increase the employees‟ commitment. The
organisationally driven reasons to outsource are to enhance effectiveness by focusing on what
each part do best, to transform the organisation and, to increase product and service value (ibid.).
Furthermore, the improvement driven reasons to outsource are to improve different operating
performances such as higher quality, increased productivity and shorter cycle times (ibid.).

While this stands, Quelin and Duhamel (2003) write the opposite, they mean that there is more
to outsourcing than the effectiveness and the cost reduction, there is a growth of the company
and its performance leading to a more long-term sustainability of the company. There are
different kinds of outsourcing; companies can outsource a whole business process (Kim & Von,
2007), such as Human Resource Outsourcing (Delmotte & Sels, 2007), or only outsource a part
of a business process such as recruitment process as this dissertation will focus on.

3.4.1 Business Process Outsourcing (BPO)

In Business Process Outsourcing (BPO) a company outsources a whole business process, which
another company will run and manage (Mahmoodzadeh, Jalalinia & Nekui Yazdi, 2009; Kim &
Won, 2007; Grefen, Ludwug, Dan & Angelov, 2006; Fernandes, Mills & Fleury, 2005).
 Business Process Outsourcing has grown to become one of the biggest leading subjects of
business and economics of our time (Click & Duening, 2005; Yang et. al, 2006). It is an
innovation considered to have most discipline, and required to have different kinds of skills for
it to run correctly and be successful, due to the fact that human factors need determined attention
and to be managed in the right way in order to succeed (Click & Duening, 2005). The primary
motivation for BPO is globalisation and competitive markets, mostly mergers and acquisitions
in different methods of entering a new market (Ghodeswar & Vaidyanathan, 2008).

Looking at BPO through the Human Resource perspective it is important to see if the board is
working towards a significant and rapid change in the business process of the companies HR.
There is also a need of a constant innovation in the Business Process of the HR in companies to
be able to have all the specifics of the contract included in the work to reduce the risks and
strengthen the trust between the two parties (Conklin, 2005). More about the HR outsourcing
and HR outsourcing as a whole BPO will be presented below.

3.4.2 Human Resource Outsourcing (HRO)

Human resource outsourcing is a specific segment of business process outsourcing. There are
two different views on Human Resource Outsourcing; the first is an explanation of the
opportunity organisations have to change their internal HR division and the second is
concerning the costs. The prime driver of outsourcing the HR division is reducing the costs,
which is what organisations strive for (Delmotte & Sels, 2007; Lievens & De Corte, 2008;
Abdul-Halim, Che-Ha & Geare, 2009). A good definition of human resource management can
be described as all decisions and work the organisation has in the connection with the
employees and its relationship with them (Beer, Spector, Lawrence, Mills & Walton, 1984;
Prowse & Prowse, 2010). Human resource activities have for years been the activities that
organisations have controlled internally. Nowadays, many are outsourcing their HR practices
and it is increasing in a fast range (Ordanini & Silvestri, 2008). Recruitment is a part of HR
Beer et al., 1984) and the next topic will introduce the Recruitment Process Outsourcing (RPO),
where companies only outsource the recruitment part of their HR.

3.4.3 Recruitment Process Outsourcing (RPO)

Finding a definition for RPO was harder than expected since RPO is still relatively new,
therefore from the data collected a definition of RPO was able to be created for this paper; RPO is
a process used to increase an organisation‟s efficiency through managerial time saving, moving the
recruitment process to external recruiting agencies providing trust and the proper competitive
expertise needed.
To have a proper understanding of RPO, a proper explanation of recruitment is required.
Companies & organisations can, in order to increase their force, use different methods to reach
a positive result, they first need to form the organisation and then re-form it (Lee, 1994). Except
for investing in hardware resources and technology for example, human assets are required to
increase effectiveness and workforce. Reorganisation or moving to another city may require
new faces within the organisation forcing them to start a recruitment process (Mazur & Kleiner,
2002).
Following simple logic and common sense, it is understood that the managers and higher
positioned employees face the task of recruiting. According to Lee (1994) organisations have
changed their way of thinking and are now more focused on the HR within the organisation.
Since recruitment is a process requiring job ads, marketing, reading, separating job applications,
telephone calls, meetings, and interviews, the recruiters within the company will fall back on
their more daily operations at work, leading to decreasing effectiveness, less control and
monitoring of the employees, basically causing a destructive domino effect. Next theories that
will be presented are the organisational culture theories which will be put against RPO in this
study.

3.5 Organisational culture

To understand organisational culture a description of an organisation is needed. Eriksson-
Zetterquist, Kalling & Styhre (2006) mean that an organisation is the process where activities
are performed in groups together making sure that an organisation is created and changed.
Furthermore, a definition of a culture which Edgar H. Schein (2002) writes is in line with what
I believe a culture is:

A pattern of shared basic assumptions that the group learned as it solved its problems of
external adaption and internal integration that has worked well enough to be considered
valid and, therefore, to be taught to new members as the correct way to perceive, think,
and feel in relation to those problems.

(Schein, 2002, p. 17)

Connecting these two definitions, one can see that they go hand in hand. When an organisation
is formed, culture is in its launching phase. In order to create both of these phenomena a group
is needed which forms and evolves the people gathered in this system. Dr. Forsyth1 has a
definition of a group which combines these two phenomena, and it is: “Two or more individuals
who are connected to one another by social relationships”.
There are several basic categories or clusters groups can be classified in since there are
billions of them in the world. One of the most famous group distinctions made by Cooley
(1907) was between primary and secondary groups (Svedberg, 2007)2. Primary groups are
usually small, have a long-term existence and the members are often easy to identify. They are
often families, gangs, close friends and so on (Svedberg, 2007; Ellsworth, 1932). Secondary
groups are larger, more goal focused and less intimate. These groups are often work groups,
professional associations, unions and so on (Svedberg, 2007)3.

There are some common characteristics‟ for groups according to Dr. Forsyth3, interaction,
interdependence, structure, goals and cohesion which each group builds on its own in order to
create the group atmosphere suited for the specific group. Hence, he also explains that there
are different factors which determine when a group will form and it all depends on the
qualities a person possesses, such as social motives, gender and personal qualities. Moreover,
there are situations where these factors do not determine if the group will form or not, for
example at work or when seeking a goal that they cannot achieve on their own. A figure from
Dr. Forsyth4 is showing on what levels a person can be in a group and on what levels he/she
can be a part of a group.
 Figure 3.2 Multilevel View of individuals and groups
(Source: Dr. Forsyth, 2010; available: https://facultystaff.richmond.edu/~dforsyth/gd/)

In conclusion, the organisational culture is of course exposed to some point through the
recruitment, although many recruiters are not considering this while evaluating the candidates
(Barnes Nelson, 1997). Barnes Nelson (1997) argues that there are reasons for recruiters to show
candidates a taste of the organisational culture in the company. The first reason is change of job
description, where jobs are being developed and the descriptions are blurred out. The second is
that the structure of the companies is going from hierarchical to structured, and the employees
need to interact with each other more than before, the last reason is the difference between
organisational culture and organisational climate.

3.6 Motivation
Reaching goals and becoming more efficient and successful, leaders of organisations need to
motivate the employees within the organisation and explain the companies‟ visions and norms for
the employees to fully understand what is expected from them (Densten, 2002). By giving the
employees this type of knowledge and motivation, the outcomes are often positive and the
employees put in an extra effort so that the organisation benefits, and becomes more efficient and
successful (ibid).
According to Theory Z by William Ouchi (1981) you can reach higher productivity by
engaged workers and it is the leaders‟ responsibility to make the co-workers fight for the
organisation (Sullivan, 1983; Daft, 2004; Eriksson-Zetterquist et. al, 2006). The name Theory
Z comes from McGregor‟s theory X and Y (Barney, 2004; Eriksson-Zetterquist et. al, 2006),
which is about how different people can be motivated (Allen, 1973; Singh, 2005). The central
key point in Theory Z is not the technology in the company but the culture and in the sense of
traditions and climate (Sullivan, 1983; Barney, 2004; Ledford, Wedenhof & Strahley, 1995).
When you have that, the confidence is built up and everybody has the same goal (Sullivan,
1983; Daft, 2004). Ouchi means that to be able to coordinate people within the frame of the
theory it is important to see the whole human being, in other words communication between
the employer and the employee (Barney, 2004; Eriksson-Zetterquist et. al, 2006).

Moreover, Maslow introduced his theory in 1954 about motivation which builds on his
observations as a human psychology, that there is a common pattern of need, satisfaction that
people follow in general; it is called the Maslow‟s need hierarchy (Eriksson-Zetterquist et. al,
2006; Buhler, 1997; Hofman, 2007; van Zutphen, 2010). His theory shows that a person could
not go further on in the hierarchy until he or she had admitted that the need was highly or
totally completed (Jelavic & Oglivie, 2009; Shukla, Tiwari, Hung-Da Wan & Shankar, 2010).

Figure 3.3 Maslow‟s hierarchy of needs

Physiological needs: The employees‟ wages, vacations, breaks

Safety needs: Good work conditions, safety at work
Social needs: The relation between the employer and the employee.
Growth needs: Better at what they do, giving the employees recognition for their work either
by higher wage or higher position.
Self-actualisation: To see how the employees can develop him/herself by innovation and
creation. (Jelavic & Oglivie, 2009; Shukla et. al, 2010; van Zutphen, 2010)
From Maslow‟s theory Herzberg (1968) created a two-factor theory about motivation and
satisfaction (Eriksson-Zetterquist et. al, 2006). Motivators are depended of every individual and
are affected by our own wishes; these are deciding a person‟s satisfaction (Ruthankoon &
Ogunlana, 2003; Deshields, Kara & Kaynak, 2005); Furnham, Eracleous & Chamorro-
Premuzic, 2009). Hygiene factors are the factors that are decided by a person‟s surroundings
(ibid.). These factors can be a disappointment but are unable to motivate unless motivators are
fulfilled as well (Ruthankoon & Ogunlana, 2003; Furnham et. al, 2009). This theory is similar
to Maslow‟s theory where the motivators can be put on the top of the pyramid and the hygiene
factors can be at the bottom.
Motivators Hygiene factors

•Promotion •Organisational opportunities

policies
•Opportunities for •Leadership personal growth
•Pay
•Recognition •Relations with
•Responsibility others and physical
•Acheivement working conditions
•Job security

Figure 3.4 Herzberg‟s two-factor theory

3.7.1 Performance orientation

Some organisational cultures lead to organisational financial performance and that is one of the
reasons for the interest and popularity of organisational culture (Ogbonna & Harris, 2000).
Performance orientation means high expectations, enthusiasm for the job, highly organised, and
result oriented performance of the employees (Sarros, Gray, Densten & Cooper, 2005), this can
be summarised as when an employee is motivated to do his/her job. Employees who are
performance oriented often compare their performance to other employees, usually with a drive
to perform better than others instead of comparing with themselves (London & Smither, 2002).
Performance orientation defines when organisations or societies boost and prize individuals and
groups for improving and mastering their performance (House, Javidan, Hanges & Dorfman,
2002).

3.7.2 Effective orientation

Effective orientation is a tool for the new employees to develop and achieve a positive attitude
towards the organisation and the job which results in higher satisfaction and better performance
(Baldwin & Wilkinson & Barkley, 2000). Effective orientation has some benefits; they are
according to Meastre, Stainer & Stainer (1997) reduction of stress and frustration, increased
employee satisfaction, improvement of performance and integration. Organisations can achieve
effective orientation effortless by being clear with their requirements on the employees and
combine them with the individual requirements of the employees (Bruzelius & Skärvad, 2004).
Effective orientation can achieve great benefits for the organisation; Mathis & Jackson (1991,
p. 277-278) mention some key purposes of effective orientation:

Establishes a favourable employee impression of the organisation and the job.

Provides organisation and job information.
Enhances interpersonal acceptance by co-workers.
Accelerates socialisation and integration of the new employee into the organisation.
Ensures that the employee performance and productivity being more quickly.

Through effective orientation, long- and short-term success can be gained within an organisation
(Mathis & Jackson, 1991).

From these theories presented and the data collection, a model has been created to connect RPO
to organisational culture and the three factors examines.

3.7 Explanation of the model

The model presented below was created to clarify the relevance and clearly show the links
between the crusts representing all processes. Each crust represents its process and sub-
processes it contains. The arrows represent the direction of influences this research investigates,
making it easier for the reader to build a picture and follow the logic behind the methods and
conclusion.
 RPO

Motivation

Effective Orientation

Performance
Orientation

Organisational
Culture

Figure 3.5 Arrows of RPO‟s affects on Organisational culture

4. Empirical Method

In this chapter a description of how the empirical data will be collected is presented, beginning
with descriptions of research design and strategy, time horizon, data collection and moving on
with information about sample selection and operationalisation. Last but not least, this chapter
will finish with reliability, validity and generalisability, and choices of all methods will be
presented in each part.

4.1 Research design and strategy

There are three different design classifications of research purposes, exploratory, descriptive
and explanatory, the research purpose is used to define the appropriate design classification.
Even more than one classification can be used, if there is more than one purpose in the research
(Saunders et al., 2009). An explanation of these classifications begins with exploratory study,
which is a study when one needs to understand a problem, seeking information on a deeper
level. Choosing the exploratory study there are three different principal ways one can conduct
a research; reviewing the literature, interviewing people in the researched area, and interviewing
focus groups. Exploratory study is flexible and can change direction when new data is gathered,
it goes from a broad focus and in time it narrows down (ibid.). Moving along with descriptive
study which on the contrary seeks to explain the situation, person, and set of circumstances in
detail, tries to gather as much information as possible, not to understand it, but more for the sake
of knowing (Saunders et al., 2009; McNeil & Chapman, 2005). It is hard to find a line between
the explanatory study and descriptive study, especially in business and management researches
since explanations need descriptions and vice versa (Saunders et al., 2009; McNeil & Chapman,
2005). While explanatory study is used to investigate a situation or a problem, and to find an
informal relationship between two or more variables, it can be done with statistical tests to see
the pattern of the relationship (Saunders et al., 2009).

The purpose of this dissertation is to explore how outsourcing recruitment processes influence
organisational culture. For this dissertation, exploratory study was most appropriate because it
seeks to understand a problem and to see it in a new light. This investigation aims to
understand5 how companies‟ organisational culture is affected when recruitment agencies are
used, as well as for the companies‟ exploring for themselves if they are experiencing any
changes in the culture. As mentioned above exploratory study is more depth going than other
studies, which suited this research as well. The author wanted to analyse if the companies
examined are experiencing any changes without asking direct questions. When asking indirect
questions, deeper understanding of the entire interview could be made and questions could be
analysed through the answers, so there was a need for more explanation from the interviewee.

There are seven different research strategies: experiment, survey, case study, action research,
grounded theory, ethnography and archival research. All these strategies are suitable to be used
in any of the different designs mentioned above but they are instead divided in deductive- and
inductive research approaches (ibid.).

In this dissertation a case study strategy has been used. Interviews were made with companies
in order to investigate their experience and changes in the organisational culture of the company,
which can have led to different outcomes than assumed. As mentioned above the interviews
were based on letting the interviewee himself/herself explain how they work with the
organisational culture and indirect questions about the usage and experience of recruitment
agencies. The reason why this method was chosen was to be able to provide the interviewee the
opportunity of describing with his/her own words the experience of working with recruitment
agencies and its affect on organisational culture.
 4.2 Time Horizon
It is important to determinate the direction a research should take. There are two time horizons
used to facilitate the determination of the direction, cross-sectional studies and longitudinal
studies. Cross-sectional studies focus on one particular time used to describe relation between
variables or an occurrence of a phenomenon, while longitudinal studies focus on how a situation
changes over a period of time. It is particularly made to be certain that the study is not affected
by the research process. A cross-sectional time horizon is often used when interviews are made
in a short matter of time, while a longitudinal time horizon is used to see change over time
(Saunders et al., 2009).

This dissertation has used cross-section time horizon because it consists of interviews carried
out in a short matter of time. There was no time to see how the companies have changed, even
though it could change the result giving the thought of exploring how it was before the
companies started to use recruitment agencies.

4.3 Data Collection

How the data will be collected is determined by the research question, objective and what is
being examined (Saunders et al., 2009). This research is based on case studies where companies
have been interviewed for the research in order to be in line with the research question and
objective. Case studies are used in order to understand difficult phenomena in the social world we
live in where the phenomena can be individual, group, organisational as this research is about, or
political (Yin, 2003).
The case studies in this research have examined five companies in the bank industry, where
interviews with each of these companies have taken place. The interview questions have been broad
in order to let the interviewee talk from his/her own experience instead of leading or manipulating
him/her towards a certain direction. The questions were created in a way where the interviewees
were able to describe with their own words how the relationship between RPO and organisational
culture in their company is. If the answers the interviewer was seeking did not come naturally,
specific questions were asked. Since case study is used to gain more understanding, questions were
asked during the interviews that were not provided in the interview guide.
This dissertation used exploratory study which often uses case studies (Saunders et al., 2009).
There are different kinds of case studies: single case, multiple case, holistic case and embedded
case. Single case is frequently used when a person is only working with one organisation and
only investigating questions around it. Multiple case means when more than one case is
 investigated in several companies. Holistic case study is when a whole organisation is
investigated and embedded, but also going deeper and investigating different parts of it. This
dissertation has focused on several companies, so a multiple case study has been used.
Investigation with interviews has been used because of the depth this study wanted to
accomplish. The interview guide had questions about both recruitment and organisational
culture, where the interviewee‟s experience and view on both of them were the first questions
of each part in the interviews. Moreover, the questions were broad to let the interviewee talk
freely, but while interviewing, some questions took several minutes for the interviewees‟ to
answer which could have led to difficulties without the interview guide. In conclusion, the
interviews were carried out in Swedish, took approximately thirty minutes per interview and
they constitute the primary data of this study.

4.4 Sample selection

Irrespective of what the research question or the objective is, one needs to reflect on if sampling
is needed or not. Sampling is using data available in a matter of restrictions for the research but
it is not all data available in the world. The data collected is restricted to limits of time, money
and sometimes access, meaning that not all data available is used. In some researches one can
collect all data from the population; it depends on what the research question is, yet it would
not be practical to do that (Saunders et al., 2009).

There are two types of sampling techniques: probability or representative sampling and non-
probability or judgemental sampling. The first one, probability/representative sampling is often
associated with survey-based research strategies and is divided in four stages. The first stage is to
identify a frame of sampling with the research question and objective as a base, the second is
deciding the size of the sample. The third one is selection of the technique suitable and selection of
the sample and the last one is going through the samples to see if it is significant to the population
(ibid.).
The non-probability sample indicates that it is sometimes difficult to answer the research
question by making a random choice of sampling. Non-probability sampling has different sampling
techniques that enable the researcher to be subjective in the evaluation. Researches where non-
probability is useful need to be deep and probably small made for a specific purpose (ibid.).
Sampling the organisations the author choose to narrow down to the bank industry because of
own knowledge that many banks outsource their recruitment. The banks were chosen through
finding international banks operating at least in two countries and outsource their recruitment.
The negative aspect of this study is that it is deducted on a local level and the answers may not
concur with the reality internationally. Banks are not established in the same way as
international corporations, where there is a mix of both local and international personnel. The
positive aspect is the requirements on the employees, the employees hired through recruitment
agencies need to possess quality characteristics, the work is security based and they are usually
very caring about their personnel. Banks reliability is always at risk because they are always
facing the customers where organisational culture is important to maintain since it is constantly
exposed.
The sampling led to interviews with five banks in Sweden that outsource their recruitment.
Eleven banks were contacted but some did not outsource their recruitment and some did not
want to participate in the interview. The research has been investigated by interviews with the
HR responsible person in each bank to find answers about how the organisational culture is
affected by using recruitment agencies. There was a risk of credibility decline in this research
due to how much experience the person has and the amount of employees they manage. For this
research non-probability sampling was appropriate to get a depth and understanding of how the
banks‟ culture is affected, some interviews have been face to face and some through the phone,
depending on where the HR responsible person was seated geographically.

4.5 Operationalisation
In this part the operationalisation of the model is presented, it has been divided into different
parts and explaining which factor of the model is measured with what questions. This
dissertation is about RPO‟s affect on the organisational culture and more precisely if/how RPO
affect an organisations motivation, performance orientation and effective orientation. Five
international banks in Sweden were investigated and remained confidential.

First of all the author wanted to understand why the organisations started to use recruitment
agencies and what the results were. The questions that helped measure the reason are: Why did
the organisation start to use recruitment agencies? What are the results of the RPO relationships?
Does your company use recruitment agencies only when consultants are needed or/also do you
use them to recruit into the core organisation?

It is essential to know how interviewees feel about the organisational culture. This dissertation
investigated three factors, motivation, performance orientation and effective orientation. The
questions used to measure this are: What experiences do you possess regarding organisational
culture? Have you noticed any differences in the organisational culture since initiating RPO
cooperation?
First factor examined is motivation, more precisely if/how RPO affects the motivation of the
employees since the organisations have started to use RPO and if there are any differences when
motivating consultants in comparison to when motivating the core employees. Questions asked
during the interviews to measure this factor are: How are the employees motivated? Has that
 changed since the organisation started to use RPO? Are there any differences in the motivation
of the core employees and the consultants that are hired?

Second, performance orientation factor has been measured by the questions: Do you believe
that the performance orientation of the employees has changed since the establishment of the RPO
relationship? - If so, in which way? Last factor is the effective orientation factor, this factor has
measured if there have been any differences in the cultural area. Questions used to measure this
are: Has RPO affected the employees in the matter of effective orientation? Do you believe that the
effective orientation has changed since the organisation started to use RPO?
4.6 Reliability
Reliability is referring to how collection of the data or how the conduction of the analysis will
bring reliable findings (Saunders et al. 2009). Saunders et al. (2009) writes about four threats
when it comes to reliability, these are: subject or participant error, subject or participant bias,
observer error and observer bias. The first one is referring to time, where collection of the data
can be different depending on what day of the week it is collected (ibid.). The second threat is
that the interviewee may be affected of his superior and not speak out what he really thinks
because of the restrictions, the third threat is observer error, this threat means that the questions
need to be asked in a similar way in order to not confuse the interviewee by several different
ways of asking questions. Last but not least there is an observer bias where the interviewers
may understand the answers differently (ibid.). In this dissertation the threats were all
considered while the interview questions were conducted and when the interviews took place.
To add reliability into the research, one needs to look over the findings and see whether it is
possible for the results to be equal conducting the research in other circumstances, if the raw data
is consistent with the significance of the findings, and if other researchers can reach similar result
(Saunders et al. 2009). Conducting this research, these questions were looked over and I believe
that the results can be similar even in other circumstances and the findings are significant with the
raw data.
Five international banks active in Sweden were used to create reliability and to avoid bias. With
five different banks the reliability of the results and conclusions is higher than if fewer banks
were investigated, the results are not only from one angle. Six banks were initially interviewed
but after the interview with one of the banks there was a suspicion that the interviewee talked
about staff agencies instead of recruitment agencies. Creating reliability, managers were
interviewed because they are the ones looking after the employees and making sure that
everything runs smoothly. Questions were asked in more ways to see if the answer would differ
and the answers were written down from the interviews, I also listened to the interviews several
times to make sure that nothing was missed or misunderstood.
 Most factors affecting the reliability of the data are directly related to the managers and company
regulations. The companies PR regulations and security issues may limit the managers‟ answers
manipulating the interviewer to look better in the eyes of their beholders.
Since knowledge is not a constant factor within any human life, the managers‟ knowledge and
interest in the topic limits as well the reliability of the data.

4.7 Validity
Validity refers to the data collection method and whether the findings are in line with what was
intended to measure6 (Saunders et al. 2009). Validity is to obtain accurate answers from the
respondent.8
There are four ways of assessing validity: face validity, content validity, criterion-related
validity and construct validity.7 The first, face validity is if the intended measure is measured
on the face of it, as it appears. The second way, content validity is if all aspects measured signify
the reality, two measures for example are not signifying the reality. Criterion-related validity is
about the tools created to measure the aspects it is suppose to, it needs to be significant to the
aspects it intends to measure. The last method, construct validity is about if the measure is
related to other measures conducted in other researches or theories8.

Throughout this research these four ways have been considered, face validity was conducted by
listening to the interviewees‟ voices and reactions to see how they react when some questions are
asked and to hear if the interviewees‟ are sure in their answers or not. When it comes to content
validity, this research is based on five interviews to gain validity and criterion-related was
conducted through the interview-guide where the questions were designed to get the answers
needed, a Dictaphone to avoid loss of data, and also writing down what the interviewees said. The
relevance of this area and other researches and theories have been investigated through the literature
review, making sure that it has not been done before even though similar researches where
organisational culture has been researched exist. The interviewees have been chosen carefully to
get as valid information as possible, to find the person who has most control over these issues.
To have a valid ground, triangulation needs to be implemented, with triangulation the findings
need to be analysed and the problems should be dealt with in different angles at least three
(Silverman 2005). This as well was considered, and as mentioned five banks were interviewed
so triangulation has been implemented and a valid ground was condu3cted.

6
Jens Hultman, PhD, Kristianstad University & College, lecture 16 April 2010 8
Timurs Umans, PhD, Kristianstad University & College, lecture 8 May 2010
7
Ibid.
8
Ibid.
4.8 Generalisability
Generalisability is also known as external validity, which is a way to see if the results of the
research can be applied to other researches, to generalise. This can be difficult to do if the
research is only investigating one or few companies (Saunders et al. 2009). Generalisability can
vary depending on the position of ontology and epistemology9. In a qualitative study, as this
one, the research tries to generalise analytically or naturalistically, in other words, apply findings
from a similar study to one‟s own in order to understand12. In this dissertation the goal was to
conduct an analytical generalisation, Yin (1994) explains analytical generalisation as a
generalisation to broader theories, and it is applicable to this study. Another view of analytical
generalisation is creating a study which other researches can reflect on and apply in other
situations (Ercikan & Roth, 2009).

This study is applicable in other studies and situations through the connection between the RPO
and organisational culture. If a manager or HR responsible is concerned about the affect RPO
has on organisational culture or if others want to study different angles than this study does, this
can be a good base.
 5. Empirical findings and analysis

In this chapter, the data collected from the interviews will be presented in the first part and
analysed in the second. The empirical findings will be divided in cases, where every case will
have three parts. First there will be information about the bank and the interviewee, description
about the interview and a summary of the interview. In the analysis the first step is a table where
every bank is analysed in the four factors related to RPO that this dissertation is examining.
Then every factor is examined in relation to RPO where all answers from each factor are
summarised from all the banks.

5.1 Bank 1
This bank is a merger between two well-known banks in Sweden. In March, 2010 the bank had
an operation profit over 1 million SEK and about 20 000 employees around the world. Its
primary operating countries are the Nordic and Baltic countries, but it also operates in some
countries in Asia, North America and a few other countries around Europe. The interviewee I
met is a middle-aged male and is the manager at one of the bank offices in Sweden.

The interview took place at the bank, and it took approximately forty minutes, a little bit longer
than expected. The interviewer got a lot of information about both how the company works with
recruitment agencies and how they work with the organisational culture. Some questions were
not asked because the interviewee already answered them during other questions, so it was not
necessary. Furthermore, the interviewers were pleased with the data collected and the
interviewee was cooperative and agreed to help out if any further information was necessary.

5.1.1 Interview summary

The interview started off with questions regarding the cooperation with recruitment companies
where the interviewee explained that they do not cooperate with local recruitment agencies to
the specific office. They use one recruitment agency to fill vacancies and when there is a lot of
work as well as when the employees cannot fix their schedule to fit the workload. This office
only uses the recruitment agencies for these occasions and has used them for the last two years,
but the bank in total use recruitment agencies now and then for
special services and has been using them for over five years. The reason that the bank started to
use recruitment agencies was to get a professional sort-out of all applicants and they can match
the right person for the position through the profile supplied by the bank.
 Differences that the bank has experienced after they started to use the recruitment agency is that
less resources are used in the recruitment phase; even though it is more expensive to use recruitment
agencies the manager feels that it is more profitable in the end. The quality is better because every
employee can focus on and work with the tasks they are qualified for. He does not worry about
finding the right person for the assignment, he believes that the chances of finding the right person
is the same if the agency recruits as it would be if the bank recruits itself.
Furthermore, questions were asked about the organisational culture where the manager
explained that the importance differs from person to person. He does not think that the culture
is as important as the association between the employee and the brand. On the other hand he
believes that it does matter when a person has been within the company for a while and the
signal he/she gives to the rest of the employees. Differences in the organisational culture after
they started to use the recruitment agency were difficult to connect for the manager because the
organisation had changed so much the last couple of years.

When the question about how customers react to the employees from the recruitment agency,
he did not think that there was any difference. The customers are not aware if the person is hired
in by the bank or by recruitment agencies so the reaction is more about new employees rather
than being hired from a recruitment agency. The reactions from the employees have been
positive, mostly because of the workload they would have to take care of when someone is
missing. Now they can rely on having someone to fill in on a short time notice.

The motivation has not changed since the company started to use the recruitment agency, since
the employees from the recruitment agency only work when needed and it does not affect how
the original employees work. The company works with motivation towards the employees
through health programs and health competitions.
The employees have changed their performance orientation but it is difficult to connect it to the
use of a recruitment agency. Since the company has changed both its staff and opening hours, it
has contributed to different kinds of changes, taking several other factors into consideration to
why the performance orientation has changed. The effective orientation has changed as
mentioned above and employees have a greater possibility to focus on their specialised skills in
the organisation. It would be more difficult to adapt to the changes during vacancies for the
employees, they would have to do cancellations and readjustments of the work.

Recruiting from recruitment agencies will continue in this bank to fill up with employees when
needed to be more effective in their work. The manager neither thinks that the organisation is
going to expand nor decrease. The bank may change the recruitment agency used, according to
the manager, but it is not a decision that the local offices to make. If the whole bank is changing
recruitment agency to another then the local bank is going to do it as well. There can be different
reasons to change which the local bank is not aware of and has not much to say about. To
conclude this summary, this bank is satisfied with the work the recruitment agency has provided.

5.2 Bank 2
This bank is a leading financial group in Northern Europe and employs over 20.000 people in
over 20 countries. There are over 5 million customers in their customer base. The interviewee
was a woman that has been working in the HR department for many years.

The interview was conducted over the phone and lasted for about 20 minutes. This interview
was not as long as expected but the information needed was collected. The interviewee was
kind, polite and answered as well as she could.

5.2.1 Interview summary

This bank uses recruitment agencies to fill vacancies when the workload is high and when the
core employees are not able to handle it, but it is also used for bigger projects and to fill a
specific post. The bank considers the cooperation to be time saving and is satisfied with the
relationship according to the interviewee. Some of the consultants hired by the agency, who
were not permanently hired, have been recruited to the core organisation because of the good
work they did. The organisation will continue the cooperation with recruitment agencies
because of the time and cost savings according to the interviewee.

Culture is significant for the bank and due to the age of the organisation the culture is well
worked into the organisation. RPO has not changed the culture within the organisation
according to the interviewee; she believes that it is more likely that the culture changes the
personnel from recruitment agencies.

Even though the posts are filled with both employees from recruitment agencies and core
organisation the customers are pleased with the service. The employees are satisfied with the
cooperation with recruitment agencies, and according to the interviewee the RPO relationships
have not changed the performance or effective orientation within the organisation, she believes
that it is positive in a way that goals are reached quicker and workload is lower for the core
employees. The interviewee stated that the organisation is cooperating with different
recruitment agencies and the cooperation will continue with probably all of them. The reason
why the organisation is cooperating with several agencies is according to the interviewee
because the organisation is large.
 The organisation motivates its employees through coaching and there are no differences in the
motivation from the leaders towards the employees regardless if they are from a recruitment
agency or core employees according to the interviewee. The only difference is that the personnel
from a recruitment agency do not have development and income discussions with the
management.

Effective and performance orientation have not changed in this bank according to the
interviewee, the only difference is that positive goals are achieved faster than before. The
employees are working in the same way as they did before the company started the cooperation.
5.3 Bank 3
This bank is a part of many companies, owned by a successful Swedish businessman. The bank
had a profit of almost 25 million SEK in 2009 and has about 400 employees and is operating in
the Nordic region. The interviewee is a middle-aged man, has been working for the bank for
some years and is the HR responsible for the office he operates in.

This interview was made through the phone and the communication between the interviewee
and the interviewer was good with an understanding of the questions and answers. The interview
went through smoothly and it lasted about a half-hour, the interviewee was informed about the
confidentiality and the answers were sent to the interviewee in case some questions were not
understood correctly.

5.3.1 Interview summary

In the beginning of the interview questions about recruitment were asked. The first question was
why the cooperation with recruitment agencies began with an answer that this bank takes care
of the recruitment process first and foremost themselves, but use recruitment agencies when
needed. There are some dates when the workload is huge and other when the workload is less.
The recruitment agencies are professionals when it comes to finding the right person, so to rely
on them for the recruitment process is a privilege according to the interviewee.

This bank has been cooperating with recruitment agencies for four-five years mostly to fill the
vacancies during time when the workload is largest. The use of recruitment agencies are in two
different ways, one for vacancies through telephone support and the other for employees in the
bank serving customers directly. The interviewee thinks that it is good for the bank to work this
way both for the availability for the customers and the economic factor.
 Differences since the company started to use recruitment agencies is that the customers get the
service required. Many of the employees were unsatisfied in the beginning; they were concerned
about their jobs and felt threatened, the ones with contract were actually not affected in another
way, now the employees are more positive towards the use of recruitment agencies and the
company is working hard to integrate the ones who come in.

Motivation of the employees is done through performance reviews, being the attractive
employer, health maintenance and hours that the employees can take from work to workout.
The organisation also works with coal centres and coaching, and to become better within these
areas the bank is cooperating with another company. Another motivation factor is the
employee‟s opinions which are taken to mind in the decision making and affect of the daily
work, the employees are also aloud to get educated and develop individually. The bank finds it
important to have staff willing to progress and develop and it has not changed since the company
started to work with recruitment agencies. In conclusion the employees are motivated in the
same way as they were before the cooperation.

Effective orientation has increased of the employees but the whole company has increased it in
general since the company has been working with this issue. The effective orientation of the
employees has increased mostly because they are working more smoothly even with vacancies
and days with a great deal of customers. Performance orientation on the other hand has not
changed according to the interviewee. The bank is working side to side with the recruitment
agency so that they expand together.

This bank‟s owner considers the culture with its strong values to be an important part of the
company leading to hard work keeping and carrying it on with values and brand of this bank. This
is an important question when the company is recruiting new personnel to the bank, to match the
values and to make this work out the recruitment agencies are working with the bank around these
questions.
This bank will continue to work with recruitment agencies and the interviewee even thinks that
the bank will expand the cooperation. The bank recently changed the recruitment agencies it
worked with in order to grow with the recruitment agencies.

5.4 Bank 4
This bank has not been established in Sweden as long as the other banks investigated. There are
around 6000 employees and last year the operating profit was about 200 million SEK. This bank is
only operating in Sweden has some business in the Nordic countries and in the Baltic region. The
interviewee is a young woman, working as one of the HR responsible employees at the company.
 The interviewer facilitated the interview a bit by sending the questions to the interviewee before
the interview so the interview did not take more than fifteen minutes. The interview was made
through the phone, and most of the questions were answered.
5.4.1 Interview summary
Many years ago this bank started to work with recruitment agencies mostly to find the right
person with the right competences within a specific area. There have been times when the
recruitment agencies did not meet the expectations of the bank, if they did not work fast enough
or did not find the right person for the position.

Since this bank has been using recruitment agencies for so long time it has been hard to see
changes leading to an answer that no changes occurred as far as she could tell. Concerning the
employees and their reaction towards the recruitment agencies the interviewee said that it is the
decision of the management and the employees have not much to say about it. On the other hand
their opinion matters if they notice a lack of competences of the personnel from recruitment
agencies.
The interviewee did not understand what difference it makes if the company recruited itself or
used recruitment agencies what is most important is to find the right competence for the
position. Finding the right person is important for the company so the HR responsible is with
the recruitment agencies during the last interview with the last two candidates.

Furthermore, the culture in this bank is significant and something the bank creates together with
all the employees. There are three words of value the bank stands for and everyone works around
them in every process during a day. Creating the driving spirit is also an important factor of the
culture which creates well-being if the values are shared.

Moreover, motivation of the employees is done by privileges, feedbacks and good work
environment which has not changed since the cooperation started. The interviewee said that
they believe in companionship and teamwork, good managers who coach the employees.

The changes in organisational culture of the bank, the interviewee says that it is not thanks to
the use of recruitment agencies on the other hand effective and performance orientation have
increased but according to the interviewee other factors could have brought this change.
In conclusion this bank will continue to work with recruitment agencies but it may not be the
same agencies as they work with right now. The general agreements are looked over every year
to assure that the right agency is suitable for the kind of work the bank requires.
 5.5 Bank 5
The customer base of this bank is over 10 million and the bank has almost 40.000 employees.
It is a leading bank in the Nordic markets and the vision is to stay that way to become even
greater. The interviewee was a woman and is listed as an HR partner within the organisation.

The first impression the interviewee gave was that she was very polite and eager to help out.
The interview went well and the interviewee answered all questions and useful information was
gathered. The interview took approximately 20 minutes conducted over the phone and in the
end the interviewee stated that if more information was needed the interviewer should not
hesitate to contact her.

5.5.1 Interview summary

First of all the interviewee stated that the company uses recruitment agencies when they are
employing personnel into the core organisation. The recruitment agencies are used when the
organisation fails to find people within the organisation to fill up vacant positions and when the
organisation needs employees‟ during peaks when the workload is too heavy on the core
employees. Recruitment agencies have a broader contact field which facilitates the recruitment
process due to the wide databases they possess according to the interviewee, she did not know
for how long the organisation had used recruitment agencies but she thought that it was as long
as there have been good and well-known recruitment agencies.

Thanks to the recruitment agencies the organisation avoids to create bad relationships with other
organisations in the same industry. Instead of headhunting people in other organisations the
recruitment agencies are able to find the staff needed without affecting the bank. It is more
acceptable to go through recruitment agencies than to go and approach a person working in another
bank.
According to the interviewee the customers do not notice any changes when an employee from
an agency is working or an employee from the organisation. Moreover, the employees are
positive to the use of recruitment agencies because the right personnel are hired to help the
organisation into moving forward and the workload is reduced.

Furthermore, the culture is significant for the company and it has grown by acquisitions of
smaller organisations which have different cultures. Hence, the work of removing the
organisational culture the smaller units possess is needed for the bank to do in order to achieve
the same culture, visions and values in the whole organisation.
 The interviewee said that the cooperation with recruitment agencies has not affected the culture
within the organisation. She also considers it to be important that the personnel the agencies
send are well aware of the culture and the values of the organisation.

The motivation part is significant for the organisation and managers are being educated to be
able to motivate and coach the employees. According to the interviewee employees are
motivated by benefits such as bonuses and health maintenance. The motivation of the employees
has not changed since the RPO relationships began and the consultants hired have almost the
same benefits as the core employees. The employees within the organisation are positive
towards the personnel from the recruitment agencies when they come and offload their work,
and they become more motivated to do their job.

There have not been any differences in performance and effective orientation in the organisation
because of the use of recruitment agencies. The only difference the interviewee could think of is
that the work situation is better and when the right person is employed the whole organisation
benefits. The interviewee stated that the quantity is the importance here if the quantity of personnel
hired through agencies was higher it could affect effective and performance orientation.
The organisation will continue to both cooperate with recruitment agencies and to employ on
their own. The recruitment agencies will continually be the last step when appointing new
employees. The organisation has a few agencies that it works with because of the size of the
organisation and one relationship would not be enough. Overall, the bank is satisfied with the
current relationships and will continue to cooperate with them.
 CONCLUSION

In the last chapter, the conclusions of this study are drawn and presented. The chapter begins with a summary
of this study, then conclusions are drawn, a review of this study and at last some suggestions for further
research are made.

6.1 Summary of this research

Companies outsource more and more these days, it is an increasing phenomenon, some may even say that it
is a trend companies use to enhance effectiveness (Greaver, 1999). In particular a popular process to
outsource is Human Resource which needs time and money to maintain. Within the Human Resource Process
there are different parts (Davidsson, 2005; Prowse & Prowse, 2010) and this dissertation chose to research
one of these, Recruitment Process Outsourcing (Beer et al., 1984) since little research has been conducted in
this specific area because it is a relatively new process.

The purpose of this dissertation is to see how Recruitment Process Outsourcing has affected the
organisational culture.
The more literature gathered about both RPO and organisational culture the more it made sense that
organisational culture should be affected, Factors chosen were motivation performance orientation and
effective orientation, because of the thought that these may be affected the most when it comes to
organisational culture.

6.2 Conclusion
Finding a basically untouched topic to research was not an easy task, but finally after doing some research
outsourcing was chosen. Exploring uncharted areas the author came across thoughts on how organisational
culture is affected by RPO. During the search for relevant articles and facts the author realised how little
research on RPO was conducted, and how organisational culture had considerably more, the interest in this
connection between these subjects grew. After conducting the interviews, concluding and analysing our
results, a realisation of how abstract the field of research is leads to a need of a thorough and considerable
amount of time spent to obtain ultimate results.
 During the kickoff of this dissertation, an assumption made in the background was confirmed, the low level
managers interviewed showed vast variation of knowledge and awareness of RPO and effects it may have on
their departments. Since all organisations are members of society, one should keep in mind that we live in a
multicultural era where we are daily subjected to foreign and domestic influences which affects our character
and subcultures, therefore constant changes within an organisational culture is inevitable. Hence, each
person‟s drive to survive, develop, and actualise themselves is affected by an organisation‟s activities as vice
versa an organisation is affected by its members when allied in groups. Wrapping it up, preserving a common
organisational culture is essential for each and every organisation to maintain control and common work
morale and ethics.
To come to a conclusion, this research has examined how RPO affects organisational culture. Companies
were hard to find, the author thought of which companies would be best to investigate and banks were chosen
in the end because many outsourced their recruitment. For the research five banks were interviewed and their
answers were concluded. The results of the three factors investigated, motivation, performance orientation
and effective orientation showed that effective orientation was affected the most, then performance
orientation while motivation was not affected at all.

6.3 Critical review

Going through this dissertation the author believes that it would have been better if there was more time to
observe how organisational culture works in the banks, not only by interviewing the HR-responsible but also
several others in the bank, perhaps the employees, which would have affected the final results.
Other critical factors are the observation of the banks, erstwhile, results might have been reached if another
industry was examined, as well as the size of the offices interviewed could also affect the results of how the
company works. Another factor is if the companies work similarly as in other countries as in Sweden.

Reviewing the analysis and the results, other or more factors of organisational culture could have given
different results to the study. Additionally, if interviewing the recruitment agencies managers or/and
employees, it could give the results another angle and the agencies could have shared how they work with
their personnel to maintain the organisational culture of the companies.

6.4 Practical implications

With this dissertation I wanted to facilitate the cooperation with recruitment agencies for companies and
organisations and by providing more knowledge to the area with a guideline to follow, organisations can be
more aware of the effects outsourcing the recruitment can have on their organisational culture.
Furthermore, this study is conducted to be able to aid companies that work with recruitment agencies to
maintain their culture. Reading this study, they can hopefully get a different point of view on how RPO affects
the organisational culture. Companies can be more prepared before beginning cooperation with one or several
recruitment agencies, creating awareness of negative effects as well as positive on the organisational culture.
Companies that already have cooperation with recruitment agencies can begin to think about how the
organisational culture is affected and how to reach the best development possible with the cooperation.

This research could also be used by recruitment agencies to improve their work and the view of the personnel
they send to the companies. With this knowledge they can also specialise their agency to different tasks and
expand it with coaching and own workshops to prepare their personnel more for the assignment, this could
lead to a competitive advantage for the recruitment agency.

6.5 Further research

Further research in this area could focus on a different industry and also bring out more outcomes such as
financial or productivity. On the other hand if there is an interest for the organisational culture outcome, there
are more factors that can be affected such as values and loss of company identity. Research on different
effects on organisational culture regarding national and international companies, geographical area and
environment, and the background of the recruitment agency needs to be placed under the microscope for a
more precise analysis.
 REFERENCES

Books:-

• “HR Outsourcing in India - Nandita Gurjar

• Strategic Human Resources Management - Charles R. greer

• Outsourcing Human Resources Function - Dianna L. stone & Eugene F. stone

• Managing Human Resources – Wayne Cascio

• WEBSITE

1. Naukri.com: Naukri is a popular job portal in India that also provides information about HR outsourcing
companies. You can search for HR outsourcing firms and find details about their services and offerings.

2. LinkedIn: LinkedIn is a professional networking platform where you can find profiles of various HR
outsourcing companies operating in India. Many companies have LinkedIn pages where they share
information about their services, client testimonials, and industry insights.

3. Glassdoor: Glassdoor is a platform where employees and former employees can anonymously review
companies and their work culture. You can search for HR outsourcing firms in India on Glassdoor to read
reviews and get an idea of their reputation.

4. People Matters: People Matters is a leading HR media platform in India that provides news, articles, and
insights related to HR practices. They often feature lists and articles about top HR outsourcing companies in
India.